If there were any doubt, T-Mobile CEO Mike Sievert made it clear during Tuesday’s earnings call that the “un-carrier” doesn’t see any reason to postpone the shutdown of Sprint’s old CDMA network past the current March 31 deadline.
T-Mobile announced last month that it would delay the CDMA network shutdown by three months after MVNO partner Dish Network complained that a January 1, 2022, shutdown was untenable. Dish says a delay to March still isn’t good enough, but as Sievert indicated, he’s not budging further.
Sievert was asked during the earnings conference call if the March 31 concession was the last one it would be making.
“We just don’t see any cause for a further delay,” he said. “Getting people upgraded to the right side of the digital divide and getting a high-capacity 4G/5G network in the hands of people who need it most is urgent.”
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Most of what T-Mobile had to say about the matter was included as part of the disclosure it made at the time of the announcement, Sievert said.
“We’ve been in talks with all the other parties involved, including the Department of Justice,” and following on those talks, “we just decided to take upon ourselves to voluntarily move the date” out by three months and plan to sunset the CDMA network at the end of March, he said.
“We did that after carefully looking at our own plans and determining that there wouldn’t be a material impact” to T-Mobile’s outlook or its financials, he said. “As we’ve said all along, we believe that December 31 provides ample time. And we’ve given everybody involved well over a year, way more notice than they needed. But when we look at the actual run rates, it looked to us like even at the current rates, an extra three months would be something that everyone would appreciate.”
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He reiterated that there’s no cause for a further delay. “We looked at it carefully. We found a way to do this because we wanted to do the right thing for our partner that was asking us even though we don’t feel that they needed it,” he said. “We’re pleased we were able to do it and we were pleased we were able to be responsive to our conversations with the Department of Justice to do this on a voluntary basis. We just don’t see that there would be cause to delay it further.”
Analysts at equity research firm Cowen took that to mean it’s still open for interpretation. T-Mobile management’s comments “seemed to suggest it’s not 100% certain it won’t be further delayed” and it’s “tough to hold the company to [it] given we have little/no bearing” what management is targeting for 2022 EBITDA/free cash flow, wrote Cowen analyst Colby Synesael.
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The dispute is far from over, as there’s still a case between T-Mobile and Dish Network taking place at the California Public Utilities Commission (CPUC).
The CPUC is looking into statements T-Mobile made about the timeline for shutting down its CDMA network. Dish says T-Mobile promised to keep the CDMA network running “for three years” from the merging of Sprint and T-Mobile — until July 2023. T-Mobile says it promised to close its CDMA network “within three years” of the merging of Sprint and T-Mobile.
Sievert wasn’t asked about the CPUC specifically during Tuesday’s call and he didn’t address it, but CPUC’s determination in the case presumably will be important in how T-Mobile executes the CDMA shutdown.